For Profit Parks: Not Going to be Easy!

With all the good news flowing about the success of free public skateparks, and how the trend is leaning toward bigger and better ones in the future, it’s a pretty simple mental leap that leads the average citizen to exclaim, “Maybe we should open a skatepark ourselves and charge them all money to skate.”

Properly done, for-profit, or private parks are great and offer unique advantages to public facilities. They provide a safe controlled environment in which skaters can practice and enjoy their sport. That measure of control is particularly appreciated by the parents of younger children. Private skateparks are also one of the best places to learn the basics and expose skaters and their parents to inherent risks and safety precautions, as well as fostering a working knowledge of proper skatepark etiquette. In turn, young skaters are much better prepared to handle themselves when they get to a free public facility.

Some states restrict the size of elements in their public parks, and private parks are one of the few legal sources of advanced terrain. Want to stage a competition? A private park is the winner, hands down. The bureaucratic red tape is negligent by comparison, and private facilities are already secure, fenced, and have the infrastructure in place to handle events without a major change in protocol.

Private, for-profit skateparks are also nothing new. There are a fair number of them out there, and like any business they come and go. Some have been up and running successfully for years. Almost all would have remained unnoticed by the general public were it not for the sustained popularity of the sport. It’s not surprising that entrepreneurs have been putting their feelers out with regard to opening parks for some time. They are always the first to follow the money in our land of opportunity. But only in the last year or so has the idea really hit the mainstream.

We have recently arrived at a point where virtually everyone from the skate mom to the gang at league bowling has begun to wonder whether finding an empty building, throwing down a few ramps, and charging for a session is their key to financial success. Suddenly, everyone wants in.

An e-mail I received this morning emphasizes my point perfectly: “I’m an investor with a love for flying teenagers and providing things for kids to do besides drugs. Although I love kids, I also like to make money for myself and my investors, many of whom will be skaters’ parents. As popular as the sport is, it looks like you’d have to be an idiot not to make money with a park.” Signed Mr. X from Texas. Okay, what was the question again? Of course there is no question. All Mr. X wants is validation of his belief that he can throw down a few ramps and have a grip of cash in no time.

Logic such as this tends to be based upon the assumption that the success of free public skateparks is an indicator of the potential success of a private facility. Most free municipal facilities will get a session no matter what, even when the kids know it’s crap. That is because it’s free. Charging someone money to skate even once, let alone developing a repeat clientele, is another thing entirely. To date, a direct correlation between the success of free public parks and that of private parks has yet to be established. Of course, private skateparks can be dynamic and profitable business ventures, but it has to be done right. And even then there are no guarantees. No market is ever hot enough to jump into without the proper research and planning. And like Grandpa was fond of saying, “Be careful before running out and borrowing a lot of other people’s money, because when you can’t pay them back, they will sue you.”

Private Skatepark 101

Unless one comes from within the industry, prospective skatepark owners should prepare for a steep and possibly uncomfortable learning curve. Being open-minded and tolerant is the best practice. Go with the flow. Skateboarding is a dynamic industry that is driven by emotion and defies most attempts at definition using standard business language. Previous job experience has value, but is not enough. Of course, I can already hear Mr. Fifteen Years At Such-And-Such Job and Ms. Managed A Chain Of Retail Outlets gearing up to tell me how wrong I am. Again, that experience has value and will be beneficial at some point, but it’s not enough. There will be as much to unlearn as to learn. Don’t try to make skating conform to outsider ideals. It will not.

In my experience, the more one is exposed to something, the more readily they can discern the good from the bad. Begin by visiting skateparks and talking to owners and/or staff. Travel across the country if need be. Keep an eye on the industry press, as it’s a useful source of information. Read all of the industry magazines, even the ones that appear juvenile. The ones that have been at it for years know the market well. Perhaps most important, seek out and take advice from professionals within the skateboard and skatepark industry from the beginning. And don’t expect that knowledge to be free. Professional skatepark designers should be among the first considered as most know first-hand what it takes to construct a skatepark. Don’t forget about owners of existing private skateparks. Chances are they can be hired as a consultant unless the park that you are planning is across the street from theirs. Likewise, the manager of a local skate-shop is another great resource. Sooner or later a staff will be required for any skatepark facility. Why not start networking and recruiting from the beginning? Again, don’t balk at paying for someone else’s time and knowledge. Compensating someone demonstrates that you are serious about the project and that you value the individuals’ expertise. Expect to spend anywhere from two to five thousand dollars laying the conceptual groundwork for a private skatepark facility. This is money well spent and a drop in the bucket if plans move forward. Look at it this way. The advice of qualified individuals will likely cost less than the fees of a bankruptcy attorney if the project goes pear shape due to lack preparation.

Develop A Business And Marketing Plan

A for-profit skatepark is a business, pure and simple. To begin, it’s necessary to develop a business and marketing plan based upon local demographic information. Unsure of what a business plan is? Start the research there. Without a business plan the best idea stands a much worse chance. It’s a nuts and bolts outline of what the business will be and how it will grow. From space requirements to design, construction, insurance, utilities, and amenities, it all needs to be in there. Also include a detailed narrative of how it will be accomplished, and back everything up with cost and income projections, including the promotion and marketing strategy. Then use it like a road map. Don’t even begin to approach bankers and other investors without a completed business plan or they will laugh the concept right out the door.

Developing a business plan is not that difficult, it simply takes time and effort. There are dozens of books at the local bookstore or public library on the subject. There is also a great deal of software available, both for purchase and as shareware. My computer came with a business-plan builder as part of the operating system. There are also many firms that specialize in obtaining and compiling this information for a fee.

Getting A Feel For The Numbers

In order to make any financial projections, one must be able to accurately predict the number of potential customers. The easiest way to do this is scope out the nearest private park and count traffic for a couple of weeks to gauge the market. Find out how much they charge for admission and do the math. That will give some indication of a monthly break-even point for their facility. If there are no other private parks in the vicinity, a well-designed survey within the community will determine if the need is really there. Consider contracting with a professional marketing firm unless you have expertise in this area. Avoid the temptation to take demographic data from another region and plug them into a business plan. They may look good, but will have little meaning and the banker will catch it first thing. In the end, it should be relatively clear whether the market can reasonably be expected to support the business or not.

Know Your “Target” Market

Any potential for-profit skatepark owner without extensive skate experience and/or time spent working within the skate industry will not know the intended market. For starters, I recommend throwing out any vague, idealized concept of the future customer, “the average skater”—the one on television, the well-behaved youth, cap turned backward snacking on yogurt in a tube or whatever else. If only it were that simple. Hopefully it’s no surprise that many skaters who consistently go to private skateparks are older. They can afford to pay on a regular basis to skate, have the means to get there, and possess the skills to skate the larger transitions and terrain that private skateparks typically offer.

Get ready for a mixture of individuals. Everything from the eight-year-old “first time at the skatepark with Cousin Eddie” to a 24-year-old construction worker straight from a job site and a slight detour for beer. They both want to skate, but have significantly different needs. Your business will have to identify and meet the needs of those customers and everyone else in between.

Any decent skatepark must have the events, staff, and infrastructure in place to provide all customers with a safe, comfortable place to skate. Again, tolerance and open mindedness is the key. Don’t sweat anything that’s not directly related to running a safe, comfortable facility for the customers. Getting hung up on the tattoos, piercings, language, or whatever is just spinning the wheels. The fastest way to alienate your customer and their money is with a bunch of arbitrary rules.

A Space, Design, And Construction

Indoors or outdoors? Concrete or wood ramps? The questions really begin to pick up now. Many private parks are located within existing buildings for economic reasons. When renting a building, most everything is there with the exception of the skating elements and whatever additional amenities the owner chooses to provide. The biggest benefit is if the business goes bust, the stuff just gets pulled out. But, this also presents a number of design and fabrication restrictions. The best and most successful private skateparks tend to be ones that offer a combination of concrete and wood elements. That is the surest way to meet the needs of all skill levels. The down side to going that direction is that concrete is permanent, and if the venture fails, a great deal more money will have to be spent just turning the facility back into a warehouse.

No matter what, consult the city regarding all code requirements that must be met. The most common requirements to catch folks off guard are the number of bathrooms and parking spaces required for the facility. This is usually based upon the square footage of the building and its intended use. What may have been adequate parking when the place was a machine shop may not be when it’s a skatepark.

In the end, whether made from concrete or wood, the overall popularity of any skatepark will be determined by its design, construction, and the environment that surrounds it. Any potential skatepark owner or investor would be wise to consult with a skatepark professional every step of the way. Stick to the reputable skatepark design and construction firms with a number of successful parks to their credit. Always check their references, and don’t forget the contract.

How Much Money Will I Make?

The big question with the enigmatic answer. It depends. Let’s say we have a thoughtfully designed skatepark in the right location with proper promotion, marketing, and management. This operation is overseen by an owner who remains an active part of the business. By that I mean working the typical 50 to 80 hours a week like any other entrepreneur starting out. This team should stand a pretty good chance of growing a business and turning a reasonable profit. Eventually, the owner may be able to delegate responsibility and assume a greater managerial role, or even absentee ownership. But don’t take that to the bank, because currently many private skateparks do not turn a profit. Or, if they do, it’s not much.

Maybe the best way to consider it is this: one way or another, owners of any private skatepark will be spending a great deal of their own time and money cultivating their business. It could be that the only real benefit that individual sees for a long time is the low-paying pride of self employment and the opportunity to session one’s own park. Is that enough?

Written by Anthony Gembeck

Reproduced by permission of TransWorld Skateboarding Business Magazine www.skatebiz.com